AAPL (9/14/13) Daily Analysis

This week, APPLE release the new iPhone 5S / 5C. Overall, the Street was very disappointed with the releases. Some analysts cited that iPhone 5C is overpriced and would not capture the developing market. I think this argument is invalid. Why would APPLE go after that market in the first place? In my opinion, APPLE wants to attract the affluent segment of the society, where its eco-system can be further supported and expanded by selling contents and service. This has been the thesis of APPLE business, by expanding into contents, service fees and commissions can be extracted from the content providers.

Another area of disappointment this week occurred on Sept 11, where the China Mobile deal was expected to be announced. The Street has been hoping that, China Mobile deal would expand APPLE into a 700 million costumer base that has not been available to APPLE previously. The stock price prior to that was partially built-in, thanks to excellent APPLE analysis like Munster. Obviously, this is more of a deal bigger to the Street. But I think this is a loss-loss situation for APPLE . Even if APPLE were able to announce the China Mobile deal, it would be meeting with an incredible demand, that the supple chain would be vastly compromised to meet such high demand.

Overall, the bearishmomentum is quite strong. Next week, I expect some consolidation to occur in the $454-$470 area. A further break down of $454 will lead us to $435. iPhone 5S will be available next Friday. Even though pre-order for iPhone 5C has been available this week, I suspect that APPLE will announce combined iPhone 5C / 5S sales data sometimes in the week of 9/23. A better than expect sales data will lead us back to $490-$500 zone.

I have a bearish expectation for next week, but overall, I am bullish for the month ahead.